ECB Plans to Add 170 Supervision Staff as Brexit Boosts Workload

  • SSM expects license applications on top of longer task list
  • Banks ready to relocate if Brexit talks don’t make progress

The European Central Bank plans to add about 170 staff to its banking-supervision arm next year as its workload grows, in part because of the U.K.’s decision to leave the European Union.

Lenders with their European operations headquartered in the U.K. are weighing their options for setting up units in the EU to retain access to that market. That means an added burden for the ECB, which started as the euro area’s banking supervisor in 2014 and already has projects including an in-depth examination of bank-risk models and a push to reduce bad loans.

Fewer than a third of the new positions will be for anticipated supervisory tasks related to Brexit, a spokeswoman for the ECB said in an emailed response to questions from Bloomberg. The central bank didn’t immediately disclose how many staff the Single Supervisory Mechanism currently employs.

“We as supervisors need to make sure that the banking system is safe and able to function in case of an unfavorable result of Brexit negotiations,” Korbinian Ibel, a director general at the SSM, said at a Euroforum conference in Frankfurt on Wednesday.

More than 100 banks access the EU via their U.K. banking license, Ibel said, adding that he was a “bit surprised” that fewer than half have contacted the ECB, given the time needed to approve new licenses.

Relocation Plans

Barring some major breakthrough in Brexit talks, global banks will implement their relocation plans early next year to guarantee they’re able to have new offices inside the European Union running by the time the U.K. exits, according to people with knowledge of the matter.

Read more: Brexit-Hit Banks Said to Start Moving Staff Abroad in Early 2018

“We won’t accept empty shells where decision-makers or whole operations are based outside the EU,” Ibel said. The new units will need their own governance and risk management, he said, and “this will of course be proportional -- the bigger the operation, the more personnel and systems.”

The ECB is also in close contact with the banks it supervises which have significant activities in the U.K., he said. “Our goal is that the institutions develop a clear picture of the risk a hard Brexit would have for them and that they are prepared.”

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